www.dtz.com/tr

Torun Tower Development

Valuation Report

Prepared on behalf of

Torunlar GYO

31 December 2012

www.dtz.com/tr

This Report titled “Torun Tower Development Valuation Report Update” has been

prepared by DTZ Pamir & Soyuer, as requested by Torunlar Gayrimenkul Yatırım

Ortaklığı A.Ş.

DTZ Debenham Tie Leung International Property Advisers is exclusively represented

in Turkey by Pamir ve Soyuer Gayrimenkul Danışmanlık A.Ş. (“DTZ Pamir &

Soyuer”).

The mailing address of Pamir & Soyuer is presented below:

Hakkı Yeten Caddesi 15/7

Şişli - İstanbul 34365

Phone : +90 (212) 231 5530

Fax : +90 (212) 231 5820

E-mail : admin@dtz.com.tr

Executive contacted for the purposes of this Report is:

Prepared by:

Fadime Coban, Urban Planner,

M.Sc. in Real Estate Development

CMB Licensed Valuer

Manager/Advisory Services

(e-mail: cobanf@dtz.com.tr)

Reviewed by:

Firuz Soyuer, MBA, MRICS

Managing Partner

We do not guarantee the fulfillment of any estimates contained within this report, although they have been conscientiously prepared on the basis of our own

research and information made available to us. The report may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any

contract, prospectus, agreement or other document without our prior written consent.

i

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY ......................................................................................................................... 1

II. INTRODUCTION ....................................................................................................................................... 2

A. INSTRUCTION ............................................................................................................................................ 2 B. PURPOSE OF VALUATION .......................................................................................................................... 2 C. BASIS AND DEFINITION OF VALUATION .................................................................................................... 2 D. MARKET VALUE ....................................................................................................................................... 2 E. DEFINITION OF VALUE .............................................................................................................................. 2

1. Definitions ........................................................................................................................................... 2 2. Market Value ....................................................................................................................................... 2

F. APPROACHES TO VALUATION ................................................................................................................... 3 G. ASSUMPTIONS AND SOURCES OF INFORMATION ........................................................................................ 4 H. HIGHEST AND BEST USE ASSESSMENT ...................................................................................................... 4 I. APPROACH & METHOD ............................................................................................................................. 5 J. DATE OF VALUATION ................................................................................................................................ 5 K. CURRENCY EXCHANGE RATES .................................................................................................................. 5

III. ISTANBUL GENERAL INFORMATION .......................................................................................... 6

A. GENERAL OVERVIEW ................................................................................................................................ 6 B. POPULATION ............................................................................................................................................. 6 C. TRANSPORTATION ..................................................................................................................................... 7 D. ECONOMY ................................................................................................................................................. 9

IV. MARKET OVERVIEW ...................................................................................................................... 11

A. İSTANBUL OFFICE MARKET .................................................................................................................... 11 B. OFFICE MARKET IN THE SUBJECT AREA.................................................................................................. 12

V. DESCRIPTION OF THE PROPERTY .................................................................................................. 18

A. LOCATION & ACCESS .............................................................................................................................. 18 B. DESCRIPTION OF THE PROPERTY ............................................................................................................. 19 C. LEGAL DESCRIPTION OF THE PROPERTY ................................................................................................. 19

1. Deed Registry Records ...................................................................................................................... 19 2. Zoning ................................................................................................................................................ 20

D. TORUN TOWER DEVELOPMENT ............................................................................................................... 20

VI. VALUATION ....................................................................................................................................... 22

A. COMMENTS / EXPLANATION / METHODOLOGY........................................................................................ 22 B. VALUATION OF THE PROPERTY - WITH DEVELOPMENT DCF - LAND RESIDUAL METHOD ....................... 22

1. Construction Area ............................................................................................................................. 22 2. Project Timing ................................................................................................................................... 23 3. Construction Costs ............................................................................................................................ 23 4. Soft Costs ........................................................................................................................................... 23 5. Infrastructure Cost ............................................................................................................................ 23 6. Rental Assumptions ........................................................................................................................... 23 7. Discount Rate .................................................................................................................................... 25 8. Cost Spent to Date ............................................................................................................................. 25 9. Conclusion ......................................................................................................................................... 26

VII. APPENDICES ...................................................................................................................................... 27

A. VALUATION TERMS AND CONDITIONS .................................................................................................... 27 B. TITLE ...................................................................................................................................................... 27 C. ENVIRONMENTAL MATTERS ................................................................................................................... 27 D. STATUTORY REQUIREMENTS AND PLANNING ......................................................................................... 27 E. INFORMATION ......................................................................................................................................... 28 F. LEGAL ISSUES ......................................................................................................................................... 28 G. DATE OF VALUATION AND CURRENT MARKET CONDITIONS .................................................................. 28 H. DISPOSAL RIGHTS ................................................................................................................................... 28 I. INFRASTRUCTURE ................................................................................................................................... 28

i

J. ROAD PROPOSALS ................................................................................................................................... 29 K. SURVEYS ................................................................................................................................................. 29

VIII. REFERENCES AND EXHIBITS ....................................................................................................... 30

1

I. EXECUTIVE SUMMARY

We herewith submit our Valuation Report pertaining to the Torun Tower

Development located in Şişli, İstanbul where Torunlar Tower has been implemented.

We have inspected the Property and analysed the market conditions in the related

area. Our report has been prepared in accordance with RICS (Royal Institute of

Chartered Surveyors) standards.

Property Type Land

Owner of Record Freehold rights owned by Torunlar Gayrimenkul Yatırım

A.Ş.

Deed Record 1 City İstanbul

District Şişli

Quarter Mecidiyeköy

Block No. 2011

Lot No. 7

Area 11,099.39 sq m

Type Land

Zoning Commercial and Tourism Area FAR=2.75, hmax=unlimited

(*)

Proposed

Development

Mixed use development including office and retail

components.

Total GLA 51,183.88 sq m (tower)

15,101. 87 sq m (under ground level)

(*) Provided by the client

Based on the available data and market information, together with our analysis and

experience in the İstanbul real estate market, our opinion of value of the Torunlar

GYO Property is;

Residual Land Value : USD 142,386,269

Cost Spent to Date : USD 16,185,347

Total Value of Torunlar Tower Development : USD 158,571,616

Rounded : USD 158,600,000

(One hundred fifty eight million and six hundred thousand US Dollars)

(Exhibits pp. 31 - 33)

Based on Development DCF and Residual method.

We hereby certify that we have no undisclosed interest in the Properties, and our

employment and compensation are not contingent upon our findings and valuation.

2

II. INTRODUCTION

A. Instruction

DTZ Pamir & Soyuer has been instructed by Torunlar Gayrimenkul Yatırım

Ortaklığı A.Ş. (“Torunlar GYO”) to update the valuation of the property located

in Mecidiyeköy Quarter of Şişli District of İstanbul.

DTZ Pamir & Soyuer and the Client have agreed the exact scope of instructions.

In summary, Torunlar GYO requires the “market value” of the subject property.

B. Purpose of Valuation

The valuation has been undertaken to estimate the value of the property which

is included in the portfolio of Torunlar GYO, listed in İstanbul Stock Exchange

(ISE). This is an update report of which the original was dated 30 June 2010

and will be publicized on the web page of Torunlar GYO.

C. Basis and Definition of Valuation

The basis of valuation is the Market Value.

D. Market Value

The value of Esentepe Property has been assessed in compliance with the RICS

(Royal Institute of Chartered Surveyors) standards.

The International Valuation Standards Council (IVSC) publishes the

International Valuation Standards (IVS) that set out internationally accepted

valuation principles, procedures and definitions. RICS has adopted these

standards.

The approved IVSC definition of “Market Value” is stated in the paragraph

“Definitions”.

E. Definition of Value

1. Definitions

The Property has been valued in accordance with the relevant parts of the IVSC

(International Valuation Standards Committee) manual as adopted by RICS.

The bases of valuation are as follows:

2. Market Value

3

“Market Value” is the estimated amount for which a property should exchange

on the date of valuation between a willing buyer and a willing seller in an arm’s

length transaction after proper marketing wherein the parties had each acted

knowledgeably, prudently and without compulsion.

Notes:

“…date of valuation…” means the date at which the property is deemed to

be sold.

“…the estimated amount…” refers to a price expressed in terms of money

payable for the property an arm’s-length market transaction.

“…a property should exchange…” refers to the fact that the value of a

property is an estimated amount rather than a predetermined or actual sale

price. It is the price at which the market expects a transaction to be

completed.

“…on the date of valuation…” requires that the estimated Market Value is

time specific to a given date and this date is normally the date that the

hypothetical sale is deemed to take place and is therefore different from the

date when the valuation is actually prepared.

“…between a willing buyer…” refers to one who is motivated, but not

compelled to buy.

“…a willing seller…” is neither an over-eager nor a forced seller who is

prepared to sell at any price, nor one prepared to hold out for a price not

considered reasonable in the current market.

“… in an arm’s-length transaction…” an arm’s length transaction is one

between parties, who do not have a particular or special relationship which

may make the price level uncharacteristic of the market, or make it inflated

because of an element of special value.

“…after proper marketing…” means that the property would be exposed to

the market in the most appropriate manner to effect its disposal at the best

price reasonably in accordance with the Market Value definition.

“…wherein the parties had each acted knowledgeable and prudently…”

presumes that both the willing buyer and the willing seller are reasonably

well informed about the nature and characteristics of the property, its actual

and potential uses and the state of the market at the date of valuation.

“…and without compulsion…” establishes that each party is motivated to

undertake the transaction, but neither is forced nor unduly coerced to

complete it.

F. Approaches to Valuation

The three approaches to valuation are:

- Sales Comparison Approach

4

The Sales Comparison Approach is based on the comparable asking price

and/or realized transaction value of similar properties located in the subject

area, having the same quantitative and qualitative specifications with the

subject property. The value indication is produced by comparing the

subject property to sales of similar properties. The sale prices of the

properties that are judged to be the most comparable indicate a range in

which the value of the subject property will fall.

- Income Capitalization Approach

The Income Capitalization Approach measures the present value of the

future benefits of property ownership. Income streams are converted into a

present value estimate through discounting (“discounted cash flow

analysis”).

- Cost Approach (Depreciated Replacement/Reproduction Cost)

The Cost Approach reflects market thinking by recognizing that market

participants relate value to cost. In estimating the value of a property, the

reproduction or replacement cost of the building improvements are

estimated, accrued depreciation is subtracted, and estimated land value is

added.

G. Assumptions and Sources of Information

These general terms, conditions and assumptions are the basis of our valuations

and reports normally prepared and also applied to the valuation contained in

this Report unless otherwise stated.

We have relied upon the details and information about the subject Property that

are provided by the officials of the owner company Torunlar GYO.

Areas have been taken from the information supplied by the owner company. We

have not carried out measurements on sites, but from our inspection of the

properties we have no reason to believe that the stated areas are materially

inaccurate.

H. Highest and Best Use Assessment

The “Highest and Best Use Value” is synonymous with Market Value. Highest

and best use is defined by IVSC as: The most probable use of a property which

is physically possible, appropriately justified, legally permissible, financially

feasible, and which results in the highest value of the property being valued.

The concept of highest and best use is inherent in the Market Value definition.

5

We are in the opinion that commercial use is the highest and best use of the

Property, and is in accordance with the zoning of the Property.

I. Approach & Method

In the valuation study of Esentepe Property; Development DCF and Residual

method to Valuation has been applied.

J. Date of Valuation

The date of valuation is 31 December, 2012.

K. Currency Exchange Rates

Central Bank of Turkey selling rates of the valuation date used in the valuation

report are as below.

TL/USD : 1.7826

TL/EUR : 2.3517

USD/EUR : 1.3192

6

III. ISTANBUL GENERAL INFORMATION

A. General Overview

İstanbul, the commercial and cultural capital of Turkey is one of the most

crowded metropolitan areas of the world with a total population of over 13.6

million.

Because of the geographically strategic location, İstanbul has direct control of the

Turkish Straits that link the Black and Aegean Seas. The city serves as a junction

between the land and sea trade routes.

The city is located on two continents separated by the Bosphorus, one of the

busiest and strategic straits of the world. The Bosphorus and Fatih Sultan

Mehmet Bridges connect the Asian and European Sides. European Side has

mainly a commercial and residential character while the Asian Side is basically

residential. Two thirds of the population resides in the European Side that also

contains the CBD of İstanbul such as Maslak, Levent, and Zincirlikuyu areas.

B. Population

There are 39 districts in İstanbul. According to address based population census

in 2012 population of İstanbul is 13.8 million (18.3% of Turkey). Average

population density is 2,666/sq km in the province. Approximately 100% of the

population live in the urban areas.

The most crowded district is Bağcılar with a population of 749,000 (5.4% of

total) and the less populated district is Adalar with a population of 14,552.

7

The population increase between 2009 and 2010 was 2.6%, between 2010 and

2011 was 3%, and 2011 and 2012 has been recorded as 1.6% in İstanbul

province. Male and female populations are approximately the same. People aged

less than 35 years comprise 58.8% of the total population

According to the 2012 Census, the populations of the districts are as follows:

District Population District Population

Adalar 14,552 Gaziosmanpaşa 488,258

Arnavutköy 206,299 Güngören 307,573

Ataşehir 395,758 Kadıköy 521,005

Avcılar 395,274 Kağıthane 421,356

Bağcılar 749,024 Kartal 443,293

Bahçelievler 600,162 Küçükçekmece 721,911

Bakırköy 221,336 Maltepe 460,955

Başakşehir 316,176 Pendik 625,797

Bayrampaşa 269,774 Sancaktepe 278,998

Beşiktaş 186,067 Sarıyer 289,959

Beykoz 246,352 Silivri 150,183

Beylikdüzü 229,115 Sultanbeyli 302,388

Beyoğlu 246,152 Sultangazi 492,212

Büyükçekmece 201,077 Şile 30,218

Çatalca 63,467 Şişli 318,217

Çekmeköy 193,182 Tuzla 197,657

Esenler 458,694 Ümraniye 645,238

Esenyurt 553,369 Üsküdar 535,916

Eyüp 356,512 Zeytinburnu 292,407

Fatih 428,857

Total 13,854,740

Source : Turkstat

C. Transportation

Transportation to İstanbul is provided by airways, railways, highways and

seaways. TEM (Trans European Motorway) and D-100 (E-5) highways

connect Asia and Europe via bridges over the Bosphorus and provide access to

Ankara and other European cities.

There are two airports in İstanbul. Atatürk International Airport is located in

Yeşilköy on the European side of the City approximately 25 kilometres from

the city centre (Taksim). Sabiha Gökçen International Airport is located in

Kurtköy on the Asian Side of İstanbul 50 km away from city center.

İstanbul has three ports, namely İstanbul Port (Karaköy), Haydarpaşa Port and

Ambarlı Port. Haydarpaşa and Ambarlı are freight, container and Ro-Ro ports,

while İstanbul Port is the cruiser port. Relocation of İstanbul Port is being

8

considered and new port developments are planned in Bakırköy and

Zeytinburnu.

Public transportation system within city limits of İstanbul comprises of various

railway systems, funicular, bus network and maritime services.

İstanbul maritime system operates on the shores of Bosphorus and Marmara

Sea. Ferryboats, car ferries and catamarans operate between 70 terminals.

Metrobus BRT (Bus Rapid Transit) system between Söğütlüçeşme on the

Asian Side and Avcılar on the European Side provides transportation following

the E5 Road via Bosphorus Bridge. Metrobus line currently is 41 km and has

32 stations. Construction of BRT extension to Beylikdüzü is being continued.

The railway transportation system of İstanbul comprises of various suburban

network, light railway system, metro and funicular systems.

Railway transportation in İstanbul can be summarized as below.

Railway System Type Length

(km)

Passenger

Capacity

Şişhane – Atatürk Oto Sanayi Metro 14.5 195,000 person/day

Kadıköy - Kartal Metro 22 70,000 person/hr

Aksaray – Atatürk Airport Light Railway 19.6 240,000 person/day

Kabataş - Zeytinburnu Tramway 13.2 245,000 person / day

Zeytinburnu - Güngören - Bağcılar Tramway 5.2 40,000 person / day

Topkapı - Habibler Tramway 15.3 150,000 person / day

Tünel - Karaköy Funicular 0.5 13,000 person / day

Taksim – Kabataş Funicular 0.64 30,000 person / day

Taksim - Tünel Nostalgic Tramway 1.6 5,000 person / day

Kadıköy - Moda Nostalgic Tramway 2.6 2,500 person / day

Maçka - Taşkışla Cable Car 0.347 1,000 person / day

Eyüp – Piyer Loti Cable Car 0.384 2,160 person / day

Sirkeci - Halkalı Subway Train 30 13,000 person / hour

Haydarpaşa - Gebze Subway Train 42 13,000 person / hour

Bosphorus Rail Link ‘MARMARAY’:

Marmaray is the major transportation project of İstanbul aiming to link the

European and the Asian sides’ railway systems with an undersea rail tunnel

across Bosphorus.

The project includes 1.4 km İstanbul Strait crossing by a tunnel from Yenikapı

on the European side and Söğütlüçeşme on the Asian side. 41 stations and the

upgrade of 63 km of suburban lines will create a 76.3 km high capacity line

between Gebze and Halkalı Intermediate stations will be built at Sirkeci and

Üsküdar. An interchange station with İstanbul metro and light rail will be built

at Yenikapı. Marmaray is expected to start operating in 2013.

9

Major projects under construction are:

Taksim - Yenikapı Metro 5.2 km; across the Golden Horn on a bridge and

underground through the old city.

Otogar (City bus terminal in Esenler) - Kirazlı 5.8 km LRT Line (2012)

Kirazlı - Olympic Village Metro 21.7 km with 16 stations (will serve 212)

D. Economy

Throughout history, İstanbul has been a strategic intersection between Europe,

Asia and the Middle East, allowing trade to flourish. İstanbul boasts a young

population, a dynamic private sector, regional connections and a developing

infrastructure. It has been one of the major seaports of Turkey for imports and

exports of traditional commodities such as textiles, tobacco, glass and leather.

The city is the dominant force in the Turkish economy providing 27.65% of

gross value added (GVA) activities. İstanbul takes the first place with USD

182.8 billion GVA in 2008. Based on the current data, the share of İstanbul

increased from 21% to 27.65% in Turkey’s gross value added (GVA) activities,

between 2001 and 2008. (2008 is last data available)

In terms of total gross value added, İstanbul ranked first place. The share of

industrial sector is 27.1% in total Turkish industrial sector, while share of

services sector is 31.4% in total Turkish services sector in 2008.

The contribution of services, industrial and agricultural sectors to total GVA of

İstanbul is 73.1%, 26.7% and 0.2% in 2008, respectively.

İstanbul has the highest share in foreign trade with 44% and 52.5% of export

and import of goods and services in Turkey, respectively. 2011 volume of

exports is recorded as USD 59.5 billion while volume of imports amounted to

USD 124 billion.

Many of Turkey’s manufacturing industries and commercial sectors are

concentrated around İstanbul, with large developments to the borders of the

city, within İzmit and Gebze Organized Industrial Zones. The original

industrial zones of İstanbul were concentrated within the city. Currently, large

scale manufacturing plants are located on the TEM Highway and towards the

outskirts of the city.

The city never played a dominant role in agricultural activities, but it is the

biggest consumer of agricultural goods in the country.

41.5 % of the bank deposits are collected in İstanbul, the financial capital of the

country. 38.5 % of the credits are also used in the city. Headquarters of major

local banks and insurance companies are located in İstanbul.

10

Along with the industry, insurance and banking companies, major corporations

and multinational firms in the city steer the nation's economic life.

As end of 2011, İstanbul accommodated 56.4% of all FDI firms in terms of

number of firms. Of these firms 36% are active in retail sector, 17% in

manufacturing and 15% in real estate.

İstanbul plays an important role in tourism sector with meeting, conventions,

exhibitions and congresses in the last couple of years. İstanbul accommodates

approximately 8 million foreign visitors per year.

Economic Indicators İstanbul Turkey

GDP per capita (USD, 2008) 14,591 9,384

Unemployment rate (%, 2011) 11.8 9.8

Total export volume (billion USD, 2011) 59.5 134.6

Total import volume (billion USD, 2011) 123.9 240.8

Total bank deposit (billion USD, 2010) 165.9 339.6

Total banking loan (billion USD, 2010) 126.8 329.7 Source: TURKSTAT.

11

IV. MARKET OVERVIEW

A. İstanbul Office Market

New office supply was quite limited during 2012, compared with the previous

year. As end of 2012, total Grade A office supply reached to 2.2 million sq m

in the primary office regions.

Total office supply in the European and Asian sides are 1.37 million sq m and

0.8 million sq m, respectively. Total Grade A office supply is estimated 2.7

million sq m including secondary office areas.

Approximately 63% of total Grade A office supply is located in the European

side. Although Levent - Etiler region still remain as the supply leader,

Ümraniye became the second largest primary office region, as the fastest

growing region for the last four years.

İstanbul : Grade A office supply (by regions, as 2012Q4)

Source: DTZ Pamir & Soyuer

Approximately 650,000 sq m under construction (450,000 sq m in the

European side and 200,000 sq m in the Asian side) will be delivered to the

market by 2015. Total Grade A office supply is estimated to exceed 3 million

sq m in the primary areas within the next four years. In addition,

approximately 800,000 sq m office supply in planning stage is expected to be

delivered to the market in the next five years.

The majority of the under construction developments are concentrated on the

main CBD areas, Levent and Maslak regions where availability is relatively

low. On the other hand, most of the planning stage developments are located

on the Asian side, especially, Kozyatağı - Ataşehir area where will be the new

“İstanbul Financial Center” with the relocation plan of government institutions

and banks.

0

100

200

300

400

500

600

Etile

r-Levent

Ümraniye

Ma

sla

k

Sis

li-Z

.kuyu

Ko

zya

tag

i

Airp

ort

Kavacık

Altuniz

ade

Th

ousands

Kozyatagi Airport

Secondary office areas(*)

(*) Estimation

Primary office areas

12

İstanbul office market supply forecast (2012 – 2017), ‘000 sq m

Source: DTZ Pamir & Soyuer

As end of 2012, the rental level turned back to pre-crisis level. Vacancy rate

decreased in the European side, while it slightly increased in the Asian side.

The highest asking rent is still running around USD 45 /sq m/month in Levent -

Etiler region where vacancy rate decreased to 1.5% in 2012Q4. The highest

asking rent stand at USD 30 /sq m/month and vacancy rate decreased 5.75% in

Maslak region. In Şişli – Zincirlikuyu – Beşiktaş region, the highest asking

rent is USD 40 /sq m/month and vacancy rate was 6.85% in the 2012Q4.

The highest asking rent is USD 25 /sq m/month and the vacancy rate is 10% in

Kozyatağı. In Ümraniye, the highest asking rent stands at USD 22 /sq m/month

and vacancy rate is 15% in the third quarter of 2012.

B. Office Market in the Subject Area

Büyükdere Avenue has been developing as main CBD – Central business

district area of İstanbul since 1980s. Major part of Büyükdere Avenue is Levent

region, and Mecidiyeköy is an extension of Levent.

In the following years, due to availability of land, office developments has

extended towards both north and south-west directions of Büyükdere Avenue.

Maslak region, located on the north side of Büyükdere Avenue, was an

industrial area since late 1980s. Within time Maslak has developed as an office

area and high-rise office buildings including İz Giz Plaza, Sun Plaza, Beybi Giz

Plaza, Vodafone, Oyak, Doğus, Alarko, Akbank Headquarters were built in this

once industrial area.

-

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

3,000

3,250

2012 2013 2014 2015* 2016-18*

Asia Europe

13

Prime high-rise office buildings and high-end residences are located in Levent,

such as Sapphire, Kanyon, Metrocity etc.

Mecidiyeköy, Zincirlikuyu and Esentepe are located on the south and south-

west direction of Büyükdere Avenue. Majority of the office space was

converted from former residential buildings along the Zincirlikuyu, Esentepe

and Mecidiyeköy region.

Delivered new office developments; Trump Tower and Rönesansbiz in

Mecidiyeköy, in central business district (CBD) of İstanbul are, as below;

Development Developer Completion GLA

Trump Tower Doğan H. 2011 36,000 sq m office,

Trump Tower

Development Developer Completion Land Area

RönesansBiz Rönesans 2013 March 3,917 sq m

Gross Closed A. GLA Parking Capacity Floor

24,896 sq m

13,766 sq m

office, 893 sq m

retail 1 / 100 sq m GLA

3 Basement, 8

Normal F.

Rönesansbiz

14

Rönesansbiz

Pipeline new office developments are as below;

Development Developer 2013 2014 2015

Kristal Tower Soyak

55,000

Zorlu Center Zorlu 23,700

Levent Zorlu Zorlu 70,000

Skymark Tower Pramerica-Eria

n/a

Özdilek – River Plaza Özdilek 35,000

İstanbloom Esin Yapı 9,700

Torun Tower Torunlar GYO

63,395

Ali Sami Yen T. Center Torunlar GYO 53,244

Quasar İstanbul Viatrans&Meydanbey n/a

Supply/year

138,400 118,395 53,244

Total Supply

310.039

Kristal Tower

Trump

Towers

Astoria

Maya

Akar

Tat Towers

Zorlu C.

Özsezen

The Property

Ali Sami Yen

& Quasar D.

15

Zorlu Center

Levent Zorlu Tower

Skymark Tower

Levent Özdilek D.

16

İstanbloom

Torun Center Quasar İstanbul

New office developments

Subject property is located in Mecidiyeköy region which is the major hub of

European side of Istanbul. Existing office buildings in close vicinity are Entaş,

Aygaz, Kuveytturk, Finansbank, TMSF, Denizbank, Halkbank headquarters,

and Astoria, Maya Akar, Özensen and Maya Akar office buildings.

Pipeline developments are Quasar İstanbul Development, Torun Center Ali

Sami Yen Development, Zorlu Center and Tat Towers mixed use projects in

the region.

17

Currently asking rents in CBD – Central Business District, between Şişli and

Levent area range between USD 30/sq m/month and USD 45/sq m/month.

Realized rents in A grade offices is highest in Levent region between USD 30

and USD 40/sq m/month. Asking office rents are as below;

Development GLA –sq m Asking Rent-USD sqm/mnth

Mecidiyeköybiz Office 1,700 USD 24 - 30

Trump Tower 10,000 USD 32 - 42

Metrocity D Block 2,762 USD 32 - 35

Kanyon 1,167 USD 45

Telpa 1,180 USD 45

Akmerkez

USD 30 - 40

RBS 780 USD 52

Özdilek (River Plaza) 35,000 USD 40 – 45

İstanbloom 9,700 USD 30

Astoria (Semi-furnished) USD 30 – 43

Maya Akar USD 26 – 33

Maya Akatlar USD 24 – 30

18

V. DESCRIPTION OF THE PROPERTY

A. Location & Access

Esentepe property is located on Büyükdere Avenue in Mecidiyeköy quarter of

Şişli District on the European side of İstanbul. The property is easily accessible

via E5 Highway, metro system and Metrobus mass transportation. The

property is approximately 20 km to Atatürk International Airport, 5.5 km to

Fatih Sultan Mehmet Bridge and 3 km to Bosphorus Bridge.

It is situated close to Astoria, Birleşik Fon Bank building, Şişli Municipality &

Governorship and headquarters of Kuveytturk and Finansbank. Other

developments in the area are Trump Towers, İstanbloom and Zorlu Karayolları

mixed use development.

The Property

19

B. Description of the Property

Esentepe property is located on the corner of Büyükdere Avenue and Yazarlar

Street. The land is slopped with the higher edge along Büyükdere Avenue.

Formerly it was used as a car park. Construction works have started in

November 26, 2011 and planned to be completed by the Q1 2014.

Below are the photos of development as of December 2012.

C. Legal Description of the Property

1. Deed Registry Records

As per records of Şişli Deed Registrar’s Office, the lot is defined as

follows:

Province : İstanbul

District : Şişli

Region : 2.Bölge

Quarter : Mecidiyeköy

Plan No : 306

Block No : 2011

Lot No : 7

Land Area : 11,099.39 sq m

Type : Land

Owner : Torunlar GYO A.Ş.

20

Based on the information provided by İstanbul Şişli Deed Registry;

There is a mortgage for USD 100,000,000 dated 30.11.2007 with serial

no. 16823 on behalf of Garanti Bank.

There is a leasing agreement annotation for 1 TL dated 28.12.2011 for

99 years on behalf of TEDAŞ – Turkey Electricity Delivery Inc.

2. Zoning

The property is in the regulation zone of Şişli municipality. Land had

tourism and commercial use permit with FAR: 2.75 and compulsory

purchase order for metro subway station, road and public green area.

Allocation for public use was realized in April 2011.

Land owners have appealed for plan amendments in the 1/5000 and

1/1000 scale Zoning Plan.

According to provided information from Şişli Municipality; 1/5000 and

1/1000 Zoning Plan amendments have been approved. Floor Area Ratio

(FAR) has increased to 2.75. Latest legal land area and permitted

buildable area are as below;

Gross Land Area: 14,991.60 sq m

Title Deed Area: 11,099.39 sq m

Net Land Area for Building Permit: 13,257.66 sq m

F.A.R 2.75

Net Buildable Area 36,458.57 sq m

D. Torun Tower Development

Torun Tower is comprised of an office tower and basement floors which

include office space, four car-parking floors, retail units, meeting facilities,

sport center and restaurant and bank areas on ground floor.

Provided GLA is 51,183.85 sq m for office tower and 15,101.87 sq m for

podium office in Torun Tower office development.

Breakdown of areas are as below;

Use Area, sq m

Total Gross Car Parking Areas 37,208

Total Horizontal Gross Office Areas (Basement 1 & 2) 17,289

Total Tower Gross Office Areas 52,452

Total Development Gross Area 106,949

Breakdown of Net Leasable Areas are as below;

21

Use Area, sq m

Office Tower 39,465.53

Horizontal Office Basement Floors 13,027.93

Total Development Net Area 52,493.46

Breakdown of areas according to floors are as below;

Use Floor

Car parking and shelter Basement 6

Car parking Basement 5

Car parking Basement 4

Car parking, security, building management Basement 3

Office, Retail Basement 2

Office, Retail, Fitness center Basement 1

Lobby, restaurant, bank office Ground Floor

Office, floor gardens, mechanical and technical space Tower Floors

Layout Plan Tower Floor Plan Building Section

Torun Tower office floor plate sizes are between 1,542.17 and 1,616.65 sq m

which increase on the upper floors. Building with 35 floors above ground level

and 6 basement floors will have a height of 153.37 m. Normal floor height is

4.00 m.

Construction works of Torun Tower has started at the end of November 2011 to

be completed by the end of 2014 Q1. Currently, 23% of development has been

constructed and planned to be completed as shell & core in Q1 2014.

Construction cost as of 31/12/2012 is TL 28,852,000.

22

VI. VALUATION

A. Comments / Explanation / Methodology

Market Value of Esentepe Property is estimated with the Development

DCF and Land Residual method.

Our DCF residual valuation analysis is based on the current design of the

development. Proposed construction and marketable areas of different

components have been provided by Torunlar GYO and residual land

valuation is based on these areas.

Torunlar GYO has indicated that office and retail areas will be leased. In

our valuation study office and retail areas (sq m), estimated rents and all

related costs have been considered.

For the DCF analysis, valuation studies of retail and office components

have been carried out with 1.5 years construction and 8.5 years holding

period followed by capitalization of the estimated net operating income at

the point of expected reversion. We have assumed sales of the properties at

the end of the 10th year, based on capitalization assumed to be applicable at

that point in time.

For the Residual Valuation, the same market assumptions are used to

estimate the market value of the development at completion of construction,

or the Gross Development Value (GDV). After deduction of all necessary

costs including developer’s profit, the residual land value is determined.

B. Valuation of the Property - with development DCF - Land Residual

Method

In arriving at our opinion of Market Value of the property with DCF

analysis we have adopted the following main input variables:

1. Construction Area

Total construction area is 106,949.28 sq m of which the breakdown

is as below.

Construction Area

Under Ground Office and Facility Areas 17,289 sq m

Above Ground Areas 58,328.28 sq m

23

Above information is provided by Torunlar GYO.

2. Project Timing

Project timing is estimated as follows;

Construction Period 1.5years

3. Construction Costs

Unit construction costs of different components are estimated as

follows.

Type Average Unit Construction Cost

(US$ /sq m)

Office & Retail Areas $850

Car Parking & Technical Areas $300

4. Soft Costs

Soft costs are architecture/engineering projects, development and

project control, legal advisory and other professional expenses and

are estimated as 8% of total construction costs.

5. Infrastructure Cost

Infrastructure expenses are estimated as 10% of total construction

costs.

6. Rental Assumptions

Gross Leasable Area

Breakdown of areas is as follows.

Office Area-sq m

Above Ground Leasable Area (Tower) 51,183.88

Under Ground Leasable Area 15,101.87

Total GLA 66,285.75

Estimated Unit Rents

Closed Car Parking, Common & Technical Areas 31,332 sq m

Total 106,949.28 sq m

24

Taking into consideration the rent levels in İstanbul CBD average

monthly unit rents per sq m are estimated as USD 37 / sq m / month

for above ground office areas and USD 18 / sq m / month for

underground office area. Annual rent increase is assumed as 3%.

Lease Schedule

Delivery of office areas has been estimated to be at year 1.5. The

property will be leased to a single tenant with 100% occupancy

according to on-going leasing negotiations.

Property Tax

Tax amount is estimated as USD 780,004. Tax amount is increased

by 4% for the following years.

Insurance Premiums

Insurance premium for the office area to be paid by Torunlar GYO is

estimated as 2% of total annual office revenues starting from Year 2.

Operational Costs

Generally, operational costs of the office buildings (management,

security, energy etc.) are paid by the tenants. Facility management

service fee (administrative expenses) is assumed to be included in

the operational costs and is not considered as an additional expense.

Operational costs are not included in the cash flow.

Vacancy and Collection Loss

5% of total rent revenues is assumed to be vacancy and collection

loss.

Replacement Allowances

2% of total rent revenues is assumed to be replacement allowances

starting from the 5th

year of operation.

Taxes

25

The figures provided in this study do not include VAT.

Capitalization Rate – Terminal Value

The capitalization rate expresses the relation between annual net

operating income produced by the property and its sales price.

We have estimated a capitalization rate of 7.5% for the office

development terminal value projections at the end of the 10-year.

Deed Transaction & Brokerage Fee

It is assumed that the property will be sold at the end of the 10 year

holding period. Deed transaction fee is 2% of sales price. Brokerage

fee is estimated as 0.75% of sales price (2.75% total).

7. Discount Rate

The discount rate reflects the required return on investment assumed

for a project by a typical investor. The present value of the expected

cash flows is calculated by discounting the income expected to be

generated by this rate.

Discount rate for the NPV calculation of development is estimated as

10.50%. Risks involve development risk, developer’s risks and

competition risk in the market.

8. Cost Spent to Date

It has been stated by Torunlar GYO that circa USD 16,185,000 has

been spent on site works, levelling and first floors of development as

of 31/12/2012.

26

9. Conclusion

Having regard to the above factors and assumptions, we are of the

opinion that the total Market Value of the Esentepe Property is;

Residual Land Value : USD 142,386,269

Cost Spent to Date : USD 16,185,347

Total Value of Torunlar Tower Property : USD 158,571,616

Rounded : USD 158,600,000

(One hundred fifty eight million and six hundred thousand US

Dollars)

(Exhibits pp. 31 - 33)

27

VII. APPENDICES

A. Valuation Terms and Conditions

These are the general terms, conditions and assumptions upon which our

valuations and reports are normally prepared. They apply to the valuations

contained in this Report unless we have specifically mentioned otherwise

elsewhere in this Report. In the event that any of these assumptions prove to be

incorrect then our valuations should be reviewed.

B. Title

We have been provided the title deeds of the properties. Where a Certificate of

Title has been made available, we have reflected its contents in our valuations. We

have not observed the presence of mortgage records at the related Deed Office.

Latest record summary issued by the Deed Registrar’s Office was provided by

Torunlar GYO.

We have sighted copies of title documentation and have verified title only based

on the documents received. In addition, we have relied on copies of other

documentation made available to us and have assumed that such copies are both

accurate and valid and that there have been no material changes since these

documents were issued.

C. Environmental Matters

No investigations have been carried out to establish the presence of deleterious

materials on or near the properties, and for the purposes of our report we have

assumed that no such materials are present.

However, should it be established subsequently that contamination, seepage or

pollution exists at the properties, or on any neighboring land, or that any of these

properties have been, are, or will be put to a contaminative use, our conclusions,

including our valuation, may be significantly affected.

D. Statutory Requirements and Planning

Verbal or written enquiries have been made of the relevant planning authorities as to

the possibility of highway improvement proposals, comprehensive development

schemes and other ancillary planning matters that could affect property values. The

results of our enquiries have been included within our Report where relevant.

28

We would draw your attention to the fact that employees of town planning

departments now always give information on the basis that it should not be relied

upon and that formal searches should be made if more certain information is

required.

E. Information

We have assumed that the information that the landlord and your/their respective

professional advisers have supplied to us in respect of the properties are both full and

correct.

It follows that we have assumed that details of all matters likely to affect value

within your/their collective knowledge have been made available to us and that the

information is up to date.

F. Legal Issues

Legal issues, and in particular the interpretation of matters relating to title and leases,

may have a significant bearing on the value of an interest in property. Where we

have expressed an opinion upon legal issues affecting the valuation, then such

opinion should be subject to verification by the client with a suitable qualified

lawyer. In these circumstances, we accept no responsibility or liability for the true

interpretation of the legal position of the client or other parties in respect of the

valuation of the property.

G. Date of Valuation and Current Market Conditions

All conclusions reached are as reasonably could be expected given today’s market

conditions and are valid as at the date of valuation only. We would make the very

important observation that real estate markets are dynamic and subject to

fluctuation.

We accept no responsibility for legal, economic, financial or other changes after

the date of our valuation which may impact either on the real estate market or on

investor motivations.

H. Disposal Rights

We have assumed that the owners of the properties have full and unhindered rights

to dispose of its interest in the related property.

I. Infrastructure

29

In carrying out this valuation report we have stated the available infrastructure.

J. Road Proposals

Unless we have commented to the contrary, we have assumed that no proposed

road schemes shall adversely or beneficially affect the properties.

K. Surveys

We have not carried out any geological, archaeological or soil surveys of the

properties.

We have assumed that the properties contain no inherent or unforeseen defects or

pollutive substances; that there are no unusual soil conditions which may hinder

development or use of the properties; that the load bearing qualities of the site are

sufficient to support the building(s) proposed to be built thereon; that no harmful

or dangerous materials are present in, on, under, or near the properties; and that no

items of an historical nature are present on or under the sites.

If the properties are subject to any legal burden which has not been disclosed to us

then we reserve the right to amend our valuation.

30

VIII. REFERENCES AND EXHIBITS

İsmail Kazanç

Torunlar Group of Companies

CFO

Tel : (216) 425 1328

Yıldırım Sarıbal

Torunlar REIC

Tel : (216) 425 2007

DTZ Pamir & Soyuer’s data base

Sales personnel of the major developments mentioned.

Sources of demographic and economic information:

State Planning Organization (SPO)

Central Bank of Republic of Turkey (CBRT)

Turkish Statistical Institute (TURKSTAT)

Banking Regulation and Supervision Agency (BRSA)

Ministry of Tourism and Culture

31

DCF – LAND RESIDUAL VALUATION METHOD

Gross Land Area 14,992.00 sq m

Net Land Area 13,257.66 sq m

FAR 2.75

Construction Area (included to FAR) 36,458.57 sq m

Above Ground Total Areas 52,452.00 sq m

Under Ground Total Areas 17,289.00 sq m

Closed Car Parking, Common & Technical Areas 37,208.00 sq m

TOTAL CONSTRUCTION AREAS 106,949.00 sq m

Construction Program Years 1 2 Total

Office Areas 80% 20% 100%

Retail Areas 100% 100%

Car Parking 100% 100%

Infrastructure,Landscaping, etc. 80% 20% 100%

Soft Costs (*) 80% 20% 100%

Construction Costs

Years 1 2 Total

Av. Office & Retail Areas 850.00 /sq m $47,423,880 $12,211,649 $59,635,529

Car Parking & Technical Areas 300.00 /sq m $11,162,400 $11,162,400

Annual cost increase rate @ 3%

Infrastructure, Landscaping, etc. 10% Cons. Costs $4,686,902.40 $244,232.98 $4,931,135

Soft Costs (*) 8% Cons. Costs $3,749,522 $195,386 $3,944,908

Property Tax During Construction Period $721,157 $721,157 $750,004 $1,471,161

Annual property tax increase rate @ 4%

TOTAL $67,743,862 $13,401,272 $81,145,134

NPV of Costs @ 10.50% $72,282,090

*(Soft Costs - other services and costs include project management, design/engineering, general administrative expenses, legal advisory and other professional works)

TORUN TOWER DEVELOPMENT

Development Program & Capital Investment Costs

TORUN TOWER DEVELOPMENT

Breakdown of Mixed Use Project

32

Above Ground Leasable Office Areas: 51,183.88 sqm

Under Ground Leasable Office Areas: 15,101.87 sqm

Av. Tower Rent : $37.00 /sqm/mth

Av. Podium Floor Rent : $18.00 /sqm/mth

Annual Rent Escalation 3%

Office Area Rent Revenues

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11

$11,362,821 $23,066,527 $23,758,523 $24,471,279 $25,205,417 $25,961,580 $26,740,427 $27,542,640 $28,368,919 $29,219,987

$1,631,002 $3,310,934 $3,410,262 $3,512,570 $3,617,947 $3,726,485 $3,838,280 $3,953,428 $4,072,031 $4,194,192

Total Rent Revenues $12,993,823 $26,377,461 $27,168,785 $27,983,849 $28,823,364 $29,688,065 $30,578,707 $31,496,068 $32,440,950 $33,414,179

8% $1,039,506 $1,039,506

4% $780,004 $811,204 $843,652 $877,398 $912,494 $948,994 $986,954 $1,026,432 $1,067,489 $1,110,189

2% $527,549 $527,549 $543,376 $559,677 $576,467 $593,761 $611,574 $629,921 $648,819 $668,284

$649,691 $1,318,873 $1,358,439 $1,399,192 $1,441,168 $1,484,403 $1,528,935 $1,574,803 $1,622,048 $1,670,709

5%

2% $0 $0 $0 $0 $0 $0 $593,761 $611,574 $629,921 $648,819 $668,284

$0 $9,997,073 $22,680,329 $24,423,318 $25,147,581 $25,893,234 $26,067,145 $26,839,670 $27,634,990 $28,453,776 $29,296,714

Capitalization Rate 7.50%

Terminal Value $390,622,854

Deed Transaction & Brokerage Fee @ 2.75% $10,742,128

Net Cash From Sale $379,880,725

Office Net Cash Flow $0 $9,997,073 $22,680,329 $24,423,318 $25,147,581 $25,893,234 $26,067,145 $26,839,670 $27,634,990 $408,334,501

NPV of Office Rental Revenues

NPV of Office Revenues @ 10.50% $257,602,031

of total revenues @

Total Net Income

of total revenues @

Vacancy and Collection Loss

Replacement Allowances

Marketing Costs

Operating Expenses

TORUN TOWER DEVELOPMENT

Cash Flow

Under Ground Office Areas Rent Revenues

Insurance Premium (@ 1% of Total Revenues)

Above Ground Office Areas Rent Revenues

Property Tax (annual increase @)

33

TORUN TOWER

RESIDUAL LAND VALUATION

NPV of Revenues

Office $257,602,031

Total Revenues $257,602,031 $257,602,031

NET Realization $257,602,031

NPV of Costs

Construction Costs $72,282,090 $72,282,090

Total Costs $72,282,090

Profit 20% $42,933,672

Residual Land Value $142,386,269